BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 1575 Hearing Date: June 20,
2016
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|Author: |Bonta |
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|Version: |June 13, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Sarah Huchel |
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Subject: Medical cannabis
SUMMARY: Amends various provisions of the Medical Marijuana Regulation
and Safety Act (Act).
Existing law:
1) Establishes the Bureau of Medical Marijuana Regulation
(Bureau) within the Department of Consumer Affairs (DCA) to
oversee the licensing and regulation of medical marijuana.
(Business and Professions Code (BPC) Section 19300, et seq.)
2)Defines a "licensing authority" as the state agency
responsible for the issuance, renewal, or reinstatement of the
license, or the state agency authorized to take disciplinary
action against the license. (BPC § 19300.5 (w))
3)Defines a "licensee" as a person issued a state license to
engage in commercial cannabis activity. (BPC § 19300.5 (ab))
This bill:
1)Changes certain references from "marijuana" to "cannabis" and
makes both terms interchangeable in certain sections.
2)Redefines "owner" to mean a person having an aggregate
ownership interest, other than a security interest, lien, or
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encumbrance, of five percent or more in the licensee or who
has the power to direct, or cause to be directed, the
management or control of the licensee.
3)States that if an applicant is a publicly traded company,
"owner" also means a member of the board of directors, and if
the applicant is a nonprofit entity, an "owner" is both the
chief executive officer and any member of the board of
directors.
4)Defines "commercial cannabis" or "commercial marijuana
activity" as additionally the provision or donation of medical
cannabis or a medical cannabis product, regardless of whether
the activity is undertaken on a for-profit or nonprofit basis,
or any combination thereof, and regardless of whether the
activity is for compensation or is gratuitous, except as
related to qualifying patients and primary caregivers.
5)Clarifies that a "cultivation site" is owned and operated by a
person who holds a valid state license and a valid local
license, permit, or other authorization.
6)Defines "cultivator" as a person that conducts the planting,
growing, harvesting, drying, curing, grading, or trimming of
medical cannabis and that holds a valid state license and a
valid local license, permit, or other authorization.
7)Redefines "dispensary" as a commercial facility with a fixed
location, whether or not there is direct access by customers,
where medical cannabis or medical cannabis products are
offered either individually or in any combination, for retail
sale, including an establishment that delivers, unless
delivery is expressly prohibited by local ordinance, medical
cannabis and medical cannabis products as part of a retail
sale.
8)Includes in the definition of "distributor," a person taking
custody of cannabis, for sale or transfer, and who holds a
valid state license pursuant to this chapter and a valid local
license, permit, or other authorization at the physical
location of the distributor.
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9)Adds "or other authorization" to the local requirements in the
definition of a "manufacturer."
10)Requires, in the definition of a "manufacturing site," that
the site must be owned and operated by a person also holding a
valid local license, permit, or other authorization.
11)Removes "registration" as an interchangeable term for
"license."
12)Relabels "topical cannabis" as "topical product," and amends
the definition to mean a product manufactured such that its
final stage is in the form of a topical drug, as defined by
the Center for Drug Evaluation and Research under the federal
Food and Drug Administration (FDA).
13)Requires the Bureau to be subject to review by the
appropriate policy committees of the Legislature by January 1,
2023.
14)Authorizes the California Department of Public Health (DPH)
to create, issue, and suspend or revoke manufacturing and
testing licenses for a violation. Requires DPH to seek and
include feedback from the scientific community and cannabis
testing industry when promulgating testing regulations, and
requires DPH to review and update medical cannabis testing
standards on an annual basis, incorporating new testing
technology, such as DNA testing for contaminants.
15)Broadens the authority from the DCA to any licensing
authority, which may, on its own motion at any time before a
penalty assessment is placed into effect and without any
further proceedings, review the penalty, but that a review
shall be limited to its reduction.
16)States the intent of the Legislature to enact a statute that
improves the medical cannabis industry's ability to comply
with federal law and regulations that would allow improved
access to banking services.
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17)Requires the Board of Equalization (BOE), in conjunction with
the Department of Business Oversight (DBO), to form an
advisory group made up of representatives from financial
institutions, nonbank financial service providers, the medical
cannabis industry, law enforcement, and federal banking
regulators and submit a report by July 1, 2017 to the
Legislature with recommendations from the advisory group that
will improve financial monitoring of medical cannabis
businesses.
18)Requires the advisory group to examine strategies, such as
the use of integrated point-of-sale systems with state track
and trace systems and other measures that will improve
financial monitoring of medical cannabis businesses.
19)Prohibit a city, county, or city and county from adopting
ordinances that establish additional local standards,
requirements, and regulations for packaging safety standards.
This shall not include, however, packaging requirements
related to appellations of origin or other branding or
marketing materials.
20)Authorizes a city to contract in writing with the county in
which it is located to arrange for the county to fulfill any
regulatory functions relating to those licensees within the
city limits if the county has agreed to assume such
responsibility.
21)States that it is not a violation of this bill or any other
state law for a business or research institution engaged in
the research of medical cannabis, medical cannabis products,
or devices used for the medical use of cannabis or cannabis
products, to possess, transport, purchase, or otherwise
legally obtain from a licensee who is permitted to provide or
deliver medical cannabis, as specified, small amounts of
medical cannabis or medical cannabis products, not to exceed
eight ounces per month, as necessary to conduct research and
development related to medical cannabis or medical cannabis
products in a city, county, or city and county that expressly
authorizes that activity by local ordinance. A business or
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research institution engaged in the research of medical
cannabis shall obtain written authorization from its local
jurisdiction that the business or institution has met all
requirements of the local ordinance to conduct research on
medical cannabis, medical cannabis products, or devices used
for the medical use of cannabis or cannabis products.
22)States that it is not a violation of this bill or any other
state law for a licensee, as specified, to sell medical
cannabis or medical cannabis products in an amount not to
exceed eight ounces per month to a business or research
institution engaged in the research of medical cannabis, if
the business or research institution provides to the licensee
a copy of the written authorization to conduct research within
the business's or institution's jurisdiction and a copy of the
local ordinance. The licensee shall keep on file that written
authorization for at least three years and make it available
upon request to local authorities for auditing purposes.
23)Gives individuals one year from the date after the Bureau
posts a notice that licensing authorities have commenced
issuing licenses to comply with commercial cannabis licensing
laws. An entity seeking licensure pursuant to this bill shall
obtain a local license, permit, or other authorization prior
to applying for state licensure. State licensing entities
shall not issue a license to any applicant that is unable to
provide documentation confirming authorization to operate from
the local government in which the applicant proposes to
operate.
24)Authorizes the secretary or director of each licensing
authority to prescribe, adopt, and enforce emergency
regulations necessary to implement this bill.
25)Declares that state licenses shall be valid for 12 months
from the date of issuance, except as specified.
26)Clarifies that a person or entity shall not submit an
application for a state license unless that person or entity
first receives a license, permit, or authorization specific to
commercial cannabis activity from a local jurisdiction.
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27)Authorizes a licensee to operate as a for-profit business, as
a not-for-profit entity, or as a combination of both.
28)States that a cultivator is not required to send medical
cannabis to a distributor if the medical cannabis is to be
used, sold, or otherwise distributed by methods approved as
specified to a manufacturer for further manufacturing.
29)Strikes the requirement that a distributor inspect the
product to ensure its identity and quantity before ensuring
the cannabis product is tested by a testing laboratory.
30)Requires a cultivator or manufacturer to, upon issuance of a
certificate of analysis by the testing laboratory that the
product is fit for manufacturing or retail, send medical
cannabis and medical cannabis products from the approved
associated batch to the distributor. All medical cannabis and
medical cannabis products shall then undergo a quality
assurance review by the distributor prior to distribution to
ensure the identity, quality, and content of the medical
cannabis or medical cannabis product, and for tracking and
taxation purposes by the state. Cultivators and manufacturers
shall package or seal all medical cannabis and medical
cannabis products in tamper-evident packaging and use a unique
identifier, as prescribed by the Department of Food and
Agriculture, for the purpose of identifying and tracking
medical cannabis or medical cannabis products. Medical
cannabis and medical cannabis products shall be labeled as
specified, except as otherwise specified in this chapter. All
packaging and sealing shall be completed prior to medical
cannabis or medical cannabis products being transported or
delivered to a licensee, qualified patient, or caregiver,
except as otherwise specified in this chapter. The Bureau
shall specify the manner in which medical cannabis and medical
cannabis products meant for wholesale purposes shall be
packaged and sealed prior to transport, testing, quality
assurance, quality control testing, or distribution.
31)Requires the Bureau to promulgate regulations relating to the
amounts of each batch of medical cannabis or medical cannabis
product that a cultivator or manufacturer is required to send
to a distributor for inspection and a testing laboratory for
testing. The regulations shall focus on reducing diversion,
ensuring the quality of the product for the health and safety
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of patients, and allowing for efficiency in enforcement.
32)Requires the Bureau to review the appropriateness of current
license quantity and combination restrictions and report its
recommendation for elimination or extension of these
provisions to the Legislature by January 1, 2025.
33)Establishes the following license restrictions effective
January 1, 2026:
a) A licensee may only hold a state license in up to two
separate license categories, as follows:
i) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold
either a Type 6 or 7 state license.
ii) Type 6 or 7 licensees, or a combination thereof, may
also hold either a Type 1, 1A, 1B, 2, 2A, or 2B state
license.
iii) Type 6 or 7 licensees, or a combination thereof, may
also hold a Type 10A state license.
iv) Type 10A licensees may also hold either a Type 6 or
7 state license, or a combination thereof.
v) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a
combination thereof, may also hold a Type 10A state
license.
vi) Type 10A licensees may apply for Type 1, 1A, 1B, 2,
2A, or 2B state license, or a combination thereof.
vii) Type 11 licensees shall apply for a Type 12 state
license, but shall not apply for any other type of state
license.
viii) Type 12 licensees may apply for a Type 11 state
license.
ix) A Type 10A licensee may apply for a Type 6 or 7
state license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B,
4 or combination thereof if, under the 1, 1A, 1B, 2, 2A,
2B, 3, 3A, 3B, 4 or combination of licenses thereof, no
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more than four acres of total canopy size of cultivation
by the licensee is occurring throughout the state during
the period that the respective licenses are valid. All
cultivation pursuant to this section shall comply with
local ordinances.
b) Except as provided in subdivision (a), a person or
entity that holds a state license is prohibited from
licensure for any other activity authorized under this
chapter, and is prohibited from holding an ownership
interest in real property, personal property, or other
assets associated with or used in any other license
category.
34)Authorizes a Type 4 licensee to transport live immature
plants to a licensed facility, subject to the tracking,
security, and related requirements, as specified.
35)Authorizes a dispensary to be one of the following:
a) "Storefront dispensary" for licensees who have a brick
and mortar dispensary with direct physical access for the
public.
b) "Nonstorefront dispensary" for licensees who have a
brick and mortar dispensary that does not have a storefront
with direct physical access for the public.
36)Authorizes a dispensary to deliver in a city, county, or city
and county that does not expressly prohibit delivery by local
ordinance.
37)Deletes the "special dispensary status."
38)Requires the Bureau to establish advertising, marketing,
signage, and other labeling requirements and restrictions,
including a prohibition on advertising, marketing, and other
promotion of the medical cannabis or medical cannabis products
provided by a person engaging in commercial cannabis activity
but not in full compliance with this chapter.
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39)Authorizes the Bureau to provide information to verify a
state license is active and in good standing for purposes of
complying with advertising requirements.
40)Requires, one year after the Bureau posts a notice on its
Internet Web site that the licensing authorities have
commenced issuing licenses pursuant to the Act, all
advertisements for licensees to include the valid state
license number of the licensee.
41)Requires a dispensary to implement sufficient security
measures that require all medical cannabis and medical
cannabis products used for display purposes, samples, or
immediate sale to be stored out of reach of any individual who
is not employed by the dispensary.
42)Requires the Bureau to establish the following regulations
regarding the delivery of medical cannabis and medical
cannabis products:
a) Employee training standards that ensure qualified
patients and primary caregivers have adequate information
regarding the medical cannabis or medical cannabis products
that a dispensary delivers, and to provide employees with
information regarding state and federal laws and
regulations.
b) Protocols to provide qualified patients and primary
caregivers with information regarding laws, regulations,
and local ordinances relevant to providing medical cannabis
or medical cannabis products to qualified patients and
primary caregivers in the local jurisdiction in which the
dispensary is located and the local jurisdiction in which
the qualified patients and primary caregivers are located.
c) A system for registering and maintaining the status of
all delivery personnel of dispensaries, including protocols
for suspending the registrations of individuals who move
out of this state, who discontinue employment at a
dispensary, or who are under suspension or inspection by a
dispensary or local or state agencies. This system shall be
made available to local and state law enforcement,
qualified patients, primary caregivers, and any other
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entity deemed appropriate by the Bureau. Any fees
associated with registration of delivery personnel shall be
set by the Bureau and shall not exceed the reasonable
amount necessary to cover the costs to regulate the
delivery personnel and maintain the system.
d) The operating hours for delivery.
e) A requirement that any person who delivers medical
cannabis or medical cannabis products be employed by or
contract with only one dispensary at a time.
f) Minimum requirements for patient information that is
stored by each delivery operation, including, but not
limited to, the contact information for the patient and, if
applicable, his or her primary caregiver, the physician's
recommendation, and the identification card. All
identifying information obtained about a qualified patient
or primary caregiver shall be obtained and stored in
compliance with the Confidentiality of Medical Information
Act and all other privacy laws and regulations.
43)Requires the Bureau to establish requirements for all
dispensary employees who deliver medical cannabis or medical
cannabis products, including, but not limited to,
the following:
a) Possession of a valid driver's license issued by the
Department of Motor Vehicles.
b) Provide the Bureau with a current address.
c) Provide the Bureau with necessary automobile and
insurance information.
d) Registration with the Bureau.
44)Requires a testing laboratory to analyze samples according to
the following:
a) In the final form which the patient will consume the
medical cannabis or medical cannabis product, including
moisture content and other attributes.
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b) A scientifically valid methodology approved by the
accrediting body.
45)Requires residual levels of volatile organic compounds to be
below those set by the DPH. DPH shall conduct periodic audits
of the results of testing laboratories to verify their
accuracy.
46)Prohibits a licensed testing laboratory from acquiring or
receiving medical cannabis or medical cannabis products except
from a licensed facility as specified, and shall not transfer
or transport medical cannabis or medical cannabis products,
except to the licensed facility from which the medical
cannabis or medical cannabis products were acquired or
received, except as specified.
47)Replaces "Bureau" with "DPH," regarding the entity
responsible for determining labeling and package requirements.
48) Requires that the fees established by licensing authorities
are in addition to, and do not limit, any fees or taxes
imposed by a city, county, or city and county in which the
licensee operates.
49)States that a person engaging in commercial cannabis
activity without a license and required associated unique
identifiers shall be subject to civil penalties of up to twice
the amount of the license fee for each violation, and the
licensing authority, state or local authority, or court may
order the destruction of medical cannabis associated with that
violation. Each day of operation shall constitute a separate
violation of this section. All civil penalties imposed and
collected shall be deposited into the Medical Cannabis Fines
and Penalties Account, except as provided.
50)Requires any penalties collected in an action for civil
penalties by the Attorney General to be deposited into the
Medical Cannabis Fines and Penalties Account.
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51)Clarifies that particular penalties do not apply to any
activity in full compliance with the Medical Cannabis
Regulation and Safety Act.
52)States that an ordinance that regulates cannabis or
marijuana, or medical cannabis or medical marijuana, shall not
require the consent of the secretary of the California
Department of Food and Agriculture (CDFA).
53)States that certain individuals, as specified, are not
subject, on that sole basis, to specified criminal
liabilities. States that nothing shall authorize the
individual to smoke or otherwise consume cannabis unless
otherwise authorized, as specified, nor shall anything
authorize any individual or group to cultivate or distribute
cannabis in any manner other than as set forth in the Act, or
as described in the Compassionate Use Act of 1996.
54)Authorizes a collective or cooperative that operates as
specified to operate for profit, not for profit, or any
combination thereof for a year after the Bureau posts a notice
on its Internet Web site that the licensing authorities have
commenced issuing licenses. A collective or cooperative that
operates for profit shall only retain specified protections if
it possesses a valid, Board of Equalization-issued sellers
permit and a valid local license, permit, or other
authorization.
55)Requires qualified patients, persons with valid
identification cards, and the designated primary caregivers of
qualified patients and persons with identification cards, who
associate within the state in order collectively or
cooperatively to cultivate cannabis for medical purposes, to
include in the text of an advertisement the collective or
cooperative's valid State Board of Equalization issued
seller's permit number. A violation of this subdivision is an
infraction, punishable by a fine of five hundred dollars
($500).
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56)Defines "advertisement" as a notice, announcement, or
information in a public medium, including but not limited to,
television, Internet Web site, billboard, or printed
publication that promotes a location where medical cannabis is
sold or dispensed or a service that is involved in the
delivery of medical cannabis.
57)States that a collective or cooperative that operates as
specified and manufactures medical cannabis products shall
not, solely on the basis of that fact, be subject to state
criminal sanctions, as specified, if the collective or
cooperative abides by all of the following requirements:
a) Utilizes only nonvolatile solvents, as provided in the
Act or any regulations adopted pursuant to that act.
b) Is in possession of a valid sellers permit issued by the
State Board of Equalization.
c) Is in possession of a valid local license, permit, or
other authorization specific to the manufacturing of
medical cannabis products.
58)Defines "manufacturing" to include compounding, converting,
producing, deriving, processing, or preparing, either directly
or indirectly by chemical extraction or independently by means
of chemical synthesis, medical cannabis products.
59)States that no reimbursement is required by this bill because
the only costs that may be incurred by a local agency or
school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, or changes the
definition of a crime.
FISCAL
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EFFECT: This bill is keyed "fiscal" by the Legislative Counsel.
According to the Assembly Committee on Appropriations analysis
dated May 11, 2016, this bill will result in minor staff costs
to BOE and DBO to form an advisory group and produce
recommendations. The analysis notes that DPH indicates
additional requirements of this bill, including provisions
related to laboratory testing standards, edible cannabis, and
scientific input to the regulatory process will be absorbed
within existing planned workload. According to the analysis,
CDFA indicates exempting local ordinances from secretarial
approval will be fiscally beneficial to the CDFA by reducing
workload and other provisions will be absorbed within existing
planned workload. The analysis also notes that the Bureau may
incur significant new staff costs related to promulgation,
implementation, and enforcement of regulations, including
start-up costs of $160,000 and ongoing costs of $1.2 million.
According to the analysis, IT costs may also be significant but
cannot be estimated at this time.
COMMENTS:
1. Purpose. This bill is sponsored by the joint authors of this
bill, Assemblymembers Bonta, Cooley, Jones-Sawyer, Lackey,
and Wood. According to the Author's office, "AB 1575 revises
the Medical Marijuana Regulation and Safety Act (MMRSA) to
improve implementation of the regulatory framework, and ease
the transition for existing operators, local governments,
patients, and the general public."
2. California's Medical Marijuana Regulatory Background.
California began regulating medical marijuana with the
passage of the Compassionate Use Act in 1996, which exempted
patients and their primary caregivers from criminal liability
under state law for the possession and cultivation of
marijuana. In 2003, the Legislature authorized the formation
of medical marijuana cooperatives-nonprofit organizations
that cultivate and distribute marijuana for medical uses to
their members through dispensaries. Most recently, the
Medical Marijuana Regulation and Safety Act (Act) passed in
2015, which consisted of three separate bills enacted
together to license and regulate medical marijuana AB 243
(Wood, Chapter 688, Statues of 2015); AB 266 (Bonta, Chapter
689, Statutes of 2015); and SB 643 (McGuire, Chapter 719,
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Statutes of 2015). These bills created a comprehensive state
licensing system for the commercial cultivation, manufacture,
retail sale, transport, distribution, delivery, and testing
of medical cannabis. Medical marijuana cooperatives will be
phased out under the Act and replaced by state licensed
businesses.
The Act went into effect on January 1, 2016, and licensure
requirements will follow when the regulatory entities
responsible for implementation pass necessary regulations.
The Act distributes state responsibilities among six
agencies:
The Bureau: responsible for licensing and
regulating dispensaries, transporters, and distributors.
Department of Fish and Wildlife (DFW): monitor and
reduce environmental impacts of marijuana cultivation.
State Water Resources Control Board (SWRCB):
regulate the environmental impacts of marijuana
cultivation on water quality and instream flows.
CDFA: regulate medical marijuana cultivation and
issue licenses to growers.
DPH: develop and enforce regulations and
standards for medical marijuana product manufacturers
and testing laboratories.
Department of Pesticide Regulation (DPR): develop
pesticide use guidelines for the cultivation of medical
marijuana.
3. Changes to the Medical Marijuana Regulation and Safety
Act. The Author's office highlights the following
provisions of AB 1575:
Allowance of For-Profit Model
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Explicitly allows for licensed medical cannabis
businesses to operate for-profit, not-for-profit, or
under any combination thereof.
Allows existing collectives and cooperatives
organized under SB 420 to operate for profit, if they
have a valid BOE Seller's Permit and a local license,
permit, or authorization-all precursors to a state
license.
Refinements to Licenses
Requires all testing on medical cannabis be done in
the state which the patient will use.
Explicitly allows for both storefront and
non-storefront (i.e. no public access) dispensaries to
operate, while still requiring all dispensaries be brick
and mortar facilities.
Clarifies the role of the distributor by allowing
direct transfer from cultivators to manufacturers, and
clarifies that a distributor can either purchase, or
simply take custody, of the medical cannabis.
Clarifies distributors where distributors would have
to obtain local licenses.
Requires nurseries to meet standard security
standards for transportation.
Access to Banking
Requires BOE and DBO to form an advisory group of
stakeholders to address access by medical cannabis
businesses to banking, and submit a report to the
Legislature with recommendations to improve financial
monitoring of medical cannabis businesses.
Research and Development
Allows research institutions and businesses to
access limited amounts of medical cannabis for research
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purposes.
Patient Protection
Requires uniform packaging safety standards to be
developed by DPH, minimizing inconsistencies across
jurisdictions, while retaining local control over
advertising and appellations.
Advertising
Requires all licensees to submit their license
number when seeking advertising.
Requires, prior to advertising, collectives and
cooperatives to possess a valid BOE Seller's Permit, and
include the number in the advertisement or be subject to
an infraction punishable by a $500 fine.
Delivery
Sets standards for delivery drivers, including
registering information with the bureau, in order to
protect patients when drivers visit their homes.
Reiterates that delivery is allowed unless expressly
prohibited by local government.
States that delivery driver's do not need to know a
patient's condition, and a card issued pursuant to SB 420
is valid in lieu of a physician's recommendation.
DPH
Requires DPH to get input from scientists from the
industry and testing labs in developing regulations.
Requires DPH to annually review and update their
testing standards based on the latest technology,
including DNA testing for contaminants.
Requires DPH to conduct periodic audits of testing
labs to verify their results.
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Dual Licensure
Requires a local license be received prior to
issuance of the state license.
Requires dual licensure within one year that
licensing authorities begin issuing licenses.
Oversight
The Legislature will review the Bureau in 2023.
1. Related Legislation This Year. SB 837 (Committee on Budget
and Fiscal Review) of 2016 makes a number of changes to the
Act. Some changes are inconsistent with AB 1575, and some
duplicate. ( Status : SB 837 is currently pending in the
Assembly Budget Committee.)
AB 2672 (Bonilla) of 2016 changes references from "marijuana"
to "cannabis" throughout the Act. ( Status: AB 2672 is
currently pending in this Committee.)
AB 26 (Jones-Sawyer) of 2015-16 requires a cannabis licensee
to institute and maintain a training program to educate,
inform, and train the licensee's agents and employees, as
specified. ( Status: AB 26 is currently pending in this
Committee.)
2. Prior Related Legislation. AB 266 (Bonta, Cooley,
Jones-Sawyer, Lackey, and Wood, Chapter 689, Statutes of
2015) enacted the Act for the licensure and regulation of
medical marijuana, established the Bureau within the DCA,
required the CDFA to administer the provisions of the act
related to cultivation, required the DPH to administer the
provisions of the Act related to manufacturing and testing of
medical cannabis and required BOE to adopt a system for
reporting the movement of commercial cannabis and cannabis
products.
AB 243 (Wood, Chapter 688, Statutes of 2015) required the
CDFA, the DPR, the DPH, the DFW, and the SWRCB to promulgate
regulations relating to medical marijuana and its
cultivation, as specified, required various state agencies to
take specified actions to mitigate the impact that marijuana
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cultivation has on the environment, and established the Act
Fund.
SB 643 (McGuire, Chapter 719, Statutes of 2015) established
standards for the prescription of medical cannabis, required
the Medical Board of California to prioritize its
investigative and prosecutorial resources to identify and
discipline physicians and surgeons that have repeatedly
recommended excessive cannabis to patients for medical
purposes or repeatedly recommended cannabis to patients for
medical purposes without a good faith examination, as
specified, authorized counties to impose a tax upon specified
cannabis-related activity, and set forth standards for the
licensed cultivation of medical cannabis.
3. Arguments in Support. Americans for Safe Access write, "More
than 1.4 million Californians are using medical cannabis to
treat the symptoms of chronic pain, cancer, arthritis,
migraines and other serious conditions. While some grow their
own cannabis, most rely on the medical cannabis industry to
cultivate, manufacture, distribute, test, and dispense their
medicine. These legal patients expect that medical cannabis
will be regulated like other health care services - including
high standards for industry safety, quality, and integrity.
AB 1575 takes us further down that path."
4. Arguments in Opposition. Rural County Representatives of
California , Urban Counties of California , and California
State Association of Counties write, "Much of the current
contents of the bill address the concerns of a variety of
stakeholders, including counties. However, counties are
requesting additional revisions - some of them revisions to
existing statutes and some to proposals being put forth."
California Cannabis Industry Association and Consortium
Management Group both express concern about the five percent
threshold for ownership, and Consortium Management Group
additionally seeks clarity in criminal law protections for
those extracting cannabinoids.
5. Recommended Technical Amendment. The following strikes
reference to a nonexistent subdivision:
On page 20, line 35, delete "Except as described in
AB 1575 (Bonta) Page 20
of ?
subdivision (e),"
6. Policy Concerns. Several parties have expressed concern that
the definition of "ownership" in this bill is overly
restrictive. This bill defines an owner of a publicly traded
company as an officer, director, or a person or entity with
an aggregate ownership of five percent or more. For
comparison purposes, the "Control, Regulate and Tax Adult Use
of Marijuana Act" defines an owner as "all persons having an
aggregate ownership interest (other than a security interest,
lien, or encumbrance) of 20 percent or more in the licensee
and the power to direct or cause to be directed, the
management or control of the licensee."
This definition is important because an owner is considered
an applicant for licensure, and this bill restricts the
number of licenses any individual may hold.
The Author has acknowledged ongoing conversations between
stakeholders and is trying to balance the need for disclosure
with the ease of application, while acknowledging the
necessity of attracting capital.
NOTE : Double-referral to Senate Committee on Governance and Finance.
SUPPORT AND OPPOSITION:
Support:
Americans for Safe Access
Kind Financial
California Cannabis Delivery Alliance
California Credit Union League
City of Santa Monica
UCBA Trade Association
Support if amended :
Rural County Representatives of California
Urban Counties of California
California State Association of Counties
California Cannabis Industry Association
Consortium Management Group
AB 1575 (Bonta) Page 21
of ?
Opposition:
One individual
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